IFA-Backed Franchise Relationship Policy Adopted by American Legislative Exchange Council

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WASHINGTON (Press Release – Jan. 31, 2012) – The International Franchise Association today applauded the American Legislative Exchange Council (ALEC) for adopting as official policy a Resolution on the Misapplication of Employee Classification Laws, recognizing that business format franchising is a major contributor to the United States economy and that franchising is a contractual business relationship, not akin to an employment relationship.

“This policy will support IFA’s efforts on behalf of the entire franchising community to educate state legislators about the huge economic impact of franchising to their local economies and that the franchisee/franchisor relationship represents a contractual business relationship, not an employment relationship,” said IFA Senior Vice President of Government Relations & Public Policy Judith Thorman.

Noting the tremendous positive effect business format franchising has on the U.S. economy, the resolution states that any “legislation or regulations which would improperly classify franchisees as ’employees’ is a misinterpretation of labor and contract policy and deprives franchise investors of valuable economic opportunities.” ALEC further stated its opposition to the “enactment of laws that interfere with business and franchise agreements freely and openly entered into by parties.”

The resolution originated in ALEC’s Commerce, Insurance and Economic Development Task Force and passed at the 2011 States and Nation Policy Summit. It was approved by unanimous vote at the ALEC Legislative Board meeting. ALEC previously weighed in on franchising, when in 1996 the group adopted a policy highlighting the negative effects of franchise relationship laws that were being considered by several states at the time.

Comprised of individual state legislators of both political parties, ALEC’s mission is to “advance the Jeffersonian principles of free markets, limited government, federalism, and individual liberty.”

About the International Franchise Association

The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.

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